If you try to learn how to program yourself it might take you a couple of years to get to a reasonable level, and yet it might not be a skill you are suited for in any case. Hiring an offshore team might be a viable alternative, but it’s a path that’s fraught with danger. You CAN make it work however, depending on the type of startup.

Some major companies were created (at least the first version was built) with an offshore team:

And there are many smaller examples such as Socialmedian.com which successfully sold to Xing for $7.5 million.

The reason for thinking about an offshore team (rather than onshore) is purely for the cost advantages. If you have the budget to pay 100k plus salaries, then no problem, you can potentially hire a USA based team to make it happen. But if you’re working with a tighter budget an offshore team might be your best alternative.

Come on! I’m not convinced you can really build a successful startup with an offshore team …

Well there are some significant hurdles to overcome, and some tricks to making it work. You can’t expect to find a guy in India for $800 per month who is going to build the next version of Facebook for you (don’t laugh I’ve seen posts like that on freelance websites!)

It’s a lot easier if you are building something that is not too technical. A business model that does not rely on you coming up with a massive technical innovation, and instead relies on your marketing or sales skills. (If you don’t have marketing or sales OR technical skills then perhaps you should re-consider the idea of building a startup?)

Also, there are a lot of shortcuts you can take to make things easier. Need to send SMS messages as part of your app? Integrate Twillio (not a big technical challenge). Need to integrate video chat? Use Tokbox.

Hiring a company versus individual contractors

Outsourcing the entire project to a company is fraught with danger. If you’re going to build a top-notch offshore development team, your hiring process is critical. If you outsource the hiring process to another company they might do an “Ok” job but they are unlikely to have the same level of dedication and persistence in looking for truly talented developers. Also if you are hiring a company you don’t really know who you are getting, they can potentially switch developers between clients for example.

Success is about building the right team

Just as if you are building an onshore team, building the right offshore team is critical. You can’t expect to interview 3 people and find an amazing developer. In fact when hiring offshore you potentially need to go to more extreme lengths in your interview and assessment process. In my experience, the best way to assess programmers is to get them to build something in a 5 or 10 hour test, and see what they can achieve. You will need to pay for this 10 hours of work, but it’s worth it.

Compensate for what is lacking

You will need to compensate for some of the areas where your team might be lacking. One of these is design. It’s not likely you will find a developer in India or the Philippines or Russia who can also design. You will need to either have design skills yourself or you will need to hire a great designer or have a co-founder with design skills.

Finding the team members

You can use us (Staff.com of course, shameless plug!), and we are focused on providing a platform for finding and manage full time workers. We believe that if you’re starting a company you need serious workers dedicated just to you (and not doing 5 different projects for other companies at the same time). And there are also some other platforms you can use such as Upwork (previously oDesk) or Elance.

If you have your own experience in developing a startup using an offshore team, please share what you have discovered in the process

About the Author:

Rob Rawson is a co-founder of Staff.com, a global recruitment platform where you can access very talented staff at affordable rates. They also have a technology called Time Doctor which is software to improve productivity and help keep track and know what your team is working on, even when working from home.

Rob resides in Sydney, Australia but can also be found in major cities around the globe, like Paris, Kiev or San Francisco.

1 Comment

From my experience as I have outsourced a company from Elance. It is about taking your idea and conveying it across the board. Some of these companies only have 2-3 employees that are profound in English, so getting your idea across from one senior to a junior level programmer creates confusion. Luckily I know their language and I ask for frequent meetings with the whole team. Recapping from what Rob said, you definitely would want to take control of the design process. Convey your idea through examples with wireframes and a brief description of each feature. Last but not least, be patient. It definitely is a lot of work.